Laurus Labs, Biocon, Rubicon Lead Motilal Oswal’s Top Picks As Q3 Healthcare Outlook Brightens — Check Details

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Motilal Oswal Report

Motilal Oswal projects a steady performance for the Indian healthcare sector in Q3 FY26, supported by improving domestic formulations momentum. However, increased competition in select products for US market and slower pace of potential launches should keep Ebitda growth trend in check.

Domestic formulations are expected to grow 8.7% YoY to Rs 25,600 crore, led by chronic therapies such as cardiac and anti-diabetic, while acute therapies remain subdued.

US generics sales are likely to decline, primarily due to pricing pressure and reduced contribution from g-Revlimid, impacting Cipla and Dr. Reddy’s. However, Lupin and Torrent Pharma are expected to outperform with strong growth in niche products.

The hospital sector is expected to post 9% YoY revenue growth, even as occupancy declines due to aggressive capacity additions. Average revenue per occupied bed should improve moderately on a higher chronic specialty mix. Having said this, the front-loading of opex related to newer hospitals, bed additions would keep margins under pressure.

Top Picks:

Motilal Oswal reiterates Buy on Laurus Labs (CDMO differentiation), Biocon (biosimilars leadership), and Rubicon Research (US-focused niche play) for their strong growth visibility and differentiated business models.

Laurus Labs is expected to post 36% YoY Ebitda growth, while Biocon’s biologics segment is projected to grow 22% YoY.

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